(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Tuesday.
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FTSE 100 - WINNERS
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TUI, up 12%. The Anglo-German travel company said strong travel demand, particularly from the UK, will help it offset cost pressures from the grounding of the Boeing 737 MAX. TUI said it saw the "best booking volumes month in the company's history" during the three months to December - following the collapse of rival Thomas Cook in September last year. TUI is predicting high single-digit percentage growth in financial 2020 revenue, versus previous mid-to-high single digit percentage growth guidance, due to currently strong trading trends in its Markets & Airlines business. Annual EBIT is now expected to be between EUR850 million to EUR1.05 billion versus previous EUR950 million to EUR1.05 billion guidance range. The tweak in annual EBIT estimate was attributed by TUI to Boeing's intention to return 737 MAX to service by mid-2020 as compared with previous April return to service estimate. Fellow blue-chip travel stocks, easyJet and British Airways-owner International Consolidated Airlines Group were up 2.8% and 2.7%, respectively. Irish carrier Ryanair Holdings was up 1.7%.
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Ocado Group, up 2.2%. The online grocer said revenue growth was driven by increased demand, but its loss widened in its most recently-ended financial year due to increased costs. Ocado said pretax loss widened in the 52 weeks ended December 1 to GBP214.5 million from GBP44.4 million a year prior due to an increase in operating expenses. More positively, Ocado reported revenue growth of 9.9% during the year to GBP1.76 billion from GBP1.60 billion a year earlier, driven by an increase in the average number of orders per week. Looking ahead, Ocado said it expects revenue growth of 10% to 15% in its current financial year, with operating margins improvement. "The Solutions business continues to attract major players from far and wide, but crucially this pace of expansion needs to be maintained for the current share price level to be justified. The size and breadth of Ocado's expansion hitherto provides a constant stream of execution risk, while the lack of a dividend in the foreseeable future defines the stock as a pure growth play," said Interactive Investor's Richard Hunter.
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United Utilities, up 2.2%. Jefferies double upgraded the utility to Buy from Underperform.
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Rightmove, up 1.7%. Societe Generale started coverage on the property portal with a Buy rating.
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FTSE 100 - LOSERS
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NMC Health, down 13%. Private equity firm Kohlberg Kravis Roberts confirmed that it does not intend to make an offer for the UAE-focused private hospital operator. NMC on Monday confirmed it received "highly preliminary approaches" from two private equity firms. KKR said Tuesday it has not made a proposal nor discussed with NMC the terms of any possible offer. Meanwhile, GKSD Investment Holding confirmed Tuesday it is considering a potential offer for NMC, with GK Investment Holding Group acting as its adviser.
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FTSE 250 - WINNERS
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Hammerson, up 4.6%. Peel Hunt raised the shopping centre operator to Buy from Hold.
William Hill, up 2.9%. The bookmaker said it has signed a strategic partnership to be an exclusive sports book & wagering data provider of CBS Sports platforms in the US. The London-based bookmaker said the partnership will kick-off with initial integrations in March on CBS Sports digital platforms, with a full rollout planned for the fantasy football season. CBS Sports will utilise William Hill's odds, experts and more than 140 sports books to bolster its current digital offerings. In turn, William Hill will receive exclusive rights to promote its brand across CBS Sports' broad range of digital properties.
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OTHER MAIN MARKET AND AIM - WINNERS
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AA, up 2.5%. The roadside assistance provider said it expects to report growth in earnings for financial 2020 and cash flow in line with market expectations. AA said the positive momentum in the twelve months to the end of January "continues to gather pace" and remains on track with its strategic plan. For the year ended January 31, 2019, AA generated GBP341 million in trading Ebitda on revenue of GBP979 million. Pretax profit stood at GBP53 million. AA said it was able to stabilise the decline of its paid membership base, and return to growth in the second half - in line with internal expectations. This has resulted in "broadly flat" paid membership base year-on-year.
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OTHER MAIN MARKET AND AIM - LOSERS
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Nakama Group, down 53%. The UK and Asia-focused recruiter said it is considering options to improve its cash position as revenue took a hit from coronavirus in the final quarter of its current financial year. Nakama said trading for the year to the end of March has been broadly in line with management's expectations, but during the final quarter it had encountered a number of challenges. Nakama said coronavirus hurt its revenue in both Hong Kong and Singapore, as local firms are choosing to delay the start dates of new hires until the full impact of the virus has been determined. Despite this challenge, the Asia region as a whole remains highly attractive, Nakama said, and it expects that the future growth of the business will be focussed on developing its reach there. Turning to the UK, Nakama said the region remains "challenging" following the changes to IR35, as some clients are potentially looking to move payrolled contractors directly on to their payrolls, thus reducing Nakama's monthly revenue stream.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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